Brooklyn Apartments Got Cheaper At End Of 2017, Study Shows

BROOKLYN, NY — The average Brooklyn apartment got cheaper for buyers and renters alike at the end of 2017, a new study of the real estate market shows.

The borough's average home sale price for the last three months of 2017 dipped about 4 percent from 2016 to $853,000, according to a Corcoran report released last week. The firm tracks real estate sales trends in New York City.

The average rent also fell to $2,692 a month in the fourth quarter of last year, a 1.7 percent change from the prior year, according to a rent report by RentCafe. The website used data from the Yardi Matrix, a nationwide real estate database.

A slowdown at the most expensive end of the Brooklyn market drove the price drops, the reports suggest. About 5 percent of apartments sold last quarter went for $2 million or more, down from 7 percent a year before, Corcoran found.

Moreover, high-end developments in the pricy DUMBO and Brooklyn Heights neighborhoods filled up while "new development activity shifted to areas further afield in the borough," such as Midwood and Sheepshead Bay, Corcoran's report says.

Brooklyn rents, meanwhile, "had become so overpriced in terms of rent, that they were due for a correction," RentCafe's report says. The borough still has the ninth-highest average rent in the nation, Yardi Matrix data shows.

Median sale prices in Brooklyn rose about 4 percent from the prior year to $725,000 as apartments in the $500,000 to $750,000 range claimed a larger share of the housing market, Corcoran's review found.

But the median rent declined alongside the average to $2,634, a 2.7 percent drop from the fourth quarter of 2016, according to RentCafe data.

Brooklyn is still a hot real estate market — realtors closed 1,318 sales at the end of 2017, 7 percent more the same period in 2016, Corcoran's report says. That made more than 6,000 sales for all of last year, the most since 2008.

There are also fewer apartments on the market — Corcoran reported 1,688 available listings in last year's fourth quarter, a 26 percent drop from the end of 2016.

The drop in average rent, though, came as the average nationwide rent rose 2.5 percent from 2016 levels to $1,359, RentCafe's report says. Other large cities such as Boston and San Francisco saw their average rents rise 2.1 percent and 1.5 percent, respectively.

The trends in Brooklyn mirror a similar drop in Manhattan housing prices at the end of last year. A report by the real estate firm Halstead attributed the decrease to worries among wealthy buyers about the impact of the federal tax overhaul the Republican-controlled Congress approved in December.

The new law will make owning property more expensive in high-tax states like New York because of a $10,000 limit on federal deductions for state and local property taxes. The Corcoran report similarly blamed the year-end average price drop on "external market factors," as well as a smaller apartment inventory.

(Lead image: A brownstone for rent is seen in Fort Greene, Brooklyn in June 2016. Photo by Drew Angerer/Getty Images)